HeidelbergCement doubles up
HeidelbergCement AG, the German cement maker, raised more than double the amount it initially sought in the year’s biggest sale of junk bonds in euros, reports Bloomberg.
The company sold EUR2.5bn (US$3.7bn) of five-, seven- and 10-year notes, according to data compiled by Bloomberg. The Mannheim, Germany-based company originally said it would raise at least EUR1bn from five- and seven- year debt.
“The deal just shows you how strong the market is right now,” said Tatjana Greil Castro, who manages the equivalent of $1 billion of European high-yield assets at Muzinich & Co. Ltd. in London. “The company is doing all the right things from a bondholder’s point of view, but the fact it can issue 2.5 billion euros rather than just 1 billion shows the strength of demand,” said Castro, who ordered some of the bonds.
Investor demand for high-yield, or junk, debt has returned in Europe after a hiatus of almost two years. With bank rates at record lows and yields declining on investment-grade securities, investors have snapped up more than $16 billion of junk bonds in the second half, up from $4.9 billion in the first six months of the year, Bloomberg data show.
HeidelbergCement’s sale is the second-largest junk-rated debt sale overall this year in Europe.
High-yield debt is rated below Baa3 by Moody’s Investors Service and BBB- by Standard & Poor’s and Fitch Ratings.
Published under Cement News
